Why do cons avoid comparing Bush and Reagan's economic stats against other presidents?

Question

I ask this because some cons point to a growing economy and say this is proof tax cuts (mostly for the rich) work.

That is nonsense.

Every president since atleast FDR stepped out of office with an economy bigger then the one he stepped into. However, if you were to compare the percent increase in real GDP, inflation adjusted median wages, inflation adjusted tax revenues, jobs created, poverty rates, etc, etc, you would see largely see Keynesian Democrats beat supply side Republicans any day.

1) Here are the percent increase in real GDP for various presidents:

FDR 177.51% (from 32' to 45')
FDR 88.14% (from 32' to 41', without WWII)
JFK/LBJ 46.00%
CLINTON 33.81%
REAGAN 30.63%
BUSH JR 16.55% (from 00' to 06')

http://www.bea.gov/national/xls/gdplev.xls

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2) Here is the percent increase in inflation adjusted tax revenues:

FDR 447.54% (40' to 44', only data available)
CLINTON 57.91%
JFK/LBJ 37.63%
REAGAN 20.16%
BUSH JR 4.44% (assuming predictions up to 2008 hold)

http://www.whitehouse.gov/omb/budget/fy2007/sheets/hist01z3.xls

Pride,

FDR inherited a Great Depression and you don't see us whining. The economy tanked in 1929 and kept tanking for FOUR years before FDR finally turned it arond.

Answer 1

Jimmy Carter started sanctions against the USSR.( over the Afganistan conflict) This caused great hardship with their economy. THEN he started sending covert funds to the Afganistan Freedom fighters. This caused great pain in USSR with families of USSR soldiers that were being sent home in body bags. A brilliant foriegn affairs policy that was quickly adopted by President Ron Reagan as soon as he got into office. Great dissent regarding this war was commonplace across the USSR, leading to the country's eventual dimise.
All of which, mistakenly, has been credited to Ronald Reagan.



What do you do when you want to screw only the working people of your nation with the largest tax increase in history and hand those trillions of dollars to your wealthy campaign contributors, yet not have anybody realize you've done it? If you're Ronald Reagan, you call in Alan Greenspan.
Through the "golden years of the American middle class" - the 1940s through 1982 - the top income tax rate for the hyper-rich had been between 90 and 70 percent. Ronald Reagan wanted to cut that rate dramatically, to help out his political patrons. He did this with a massive tax cut in the summer of 1981.
The only problem was that when Reagan took his meat axe to our tax code, he produced mind-boggling budget deficits. Voodoo economics didn't work out as planned, and even after borrowing so much money that this year we'll pay over $100 billion just in interest on the money Reagan borrowed to make the economy look good in the 1980s, Reagan couldn't come up with the revenues he needed to run the government.
Coincidentally, the actuaries at the Social Security Administration were beginning to get worried about the Baby Boomer generation, who would begin retiring in big numbers in fifty years or so. They were a "rabbit going through the python" bulge that would require a few trillion more dollars than Social Security could easily collect during the same 20 year or so period of their retirement. We needed, the actuaries said, to tax more heavily those very persons who would eventually retire, so instead of using current workers' money to pay for the Boomer's Social Security payments in 2020, the Boomers themselves would have pre-paid for their own retirement.
Reagan got Daniel Patrick Moynihan and Alan Greenspan together to form a commission on Social Security reform, along with a few other politicians and economists, and they recommend a near-doubling of the Social Security tax on the then-working Boomers. That tax created - for the first time in history - a giant savings account that Social Security could use to pay for the Boomers' retirement.
This was a huge change. Prior to this, Social Security had always paid for today's retirees with income from today's workers (it still is today). The Boomers were the first generation that would pay Social Security taxes both to fund current retirees and save up enough money to pay for their own retirement. And, after the Boomers were all retired and the savings account - called the "Social Security Trust Fund" - was all spent, the rabbit would have finished its journey through the python and Social Security could go back to a "pay as you go" taxing system.
Thus, within the period of a few short years, Reagan dramatically dropped the income tax on America's most wealthy by more than half, and roughly doubled the Social Security tax on people earning $30,000 or less. It was, simultaneously, the largest income tax cut in America's history (almost entirely for the very wealthy), and the most massive tax increase in the history of the nation (which entirely hit working-class people).
But Reagan still had a problem. His tax cuts for the wealthy - even when moderated by subsequent tax increases - weren't generating enough money to invest properly in America's infrastructure, schools, police and fire departments, and military. The country was facing bankruptcy.
No problem, suggested Greenspan. Just borrow the Boomer's savings account - the money in the Social Security Trust Fund - and, because you're borrowing "government money" to fund "government expenditures," you don't have to list it as part of the deficit. Much of the deficit will magically seem to disappear, and nobody will know what you did for another 50 years when the Boomers begin to retire 2015.
Reagan jumped at the opportunity. As did George H. W. Bush. As did Bill Clinton (although Al Gore argued strongly that Social Security funds should not be raided, but, instead, put in a "lock box"). And so did George W. Bush.
The result is that all that money - trillions of dollars - that has been taxed out of working Boomers (the ceiling has risen from the tax being on your first $30,000 of income to the first $90,000 today) has been borrowed and spent. What are left behind are a special form of IOUs - an unique form of Treasury debt instruments similar (but not identical) to those the government issues to borrow money from China today to fund George W. Bush's most recent tax cuts for billionaires (George Junior is still also "borrowing" from the Social Security Trust Fund).
Former Bush Junior Treasury Secretary Paul O'Neill recounts how Dick Cheney famously said, "Reagan proved deficits don't matter." Cheney was either ignorant or being disingenuous - it would be more accurate to say, "Reagan proved that deficits don't matter if you rip off the Social Security Trust Fund to pay for them, and don't report that borrowing from the Boomers as part of the deficit."

Answer 2

I noticed how you forgot to include Jimmy Carter in your argument. When only the "rich" pay most of the taxes, when you give a tax cut on federal income taxes, you usually don't affect people who pay little or no federal income taxes. There are arguments that FDR's policies actually pro-longed the Great Depression; WW II effectively ended the Depression, not FDR's big-government policies. You put too much emphasis on Presidents' influence and affect on the American economy. Their are thousands of external variables that you are not considering. You also don't factor in the increases in productivity that have been the real driver of prosperity, economic growth, and a higher standard of living in the United States. If centralized planning, government spending is the path to prosperity, then why are so many of the European, Socialized countries struggling? Why has Socialism been proven to be an absolute failure just about everywhere it's been implemented?

Answer 3

They don't want to believe that their ideas on Taxes if not wrong are at least unimportant in running the economy. Spending is what makes jobs. If you ran a company you hire more people and buy more equipment because you have a call to increase out put of your product, not be cause your company saved money on taxes.

Answer 4

Reagan was a crappy President and Carter was saddled with the bills from Vietnam. Whoever "wins" the white house will have the same problems Carter had. It's a historical fact that republican Presidents spend more than democratic Presidents. Look it up for yourself.

Answer 5

No, THAT is nonsense. You cannot separate Carter from his predecessors. You also cannot blame Reagan for the early 1980s recession - that was Fed induced for the specific purpose of cleaning up the mess the Keynesians left.

The "growth" in the late 1940s-1960s was achieved through monetary mischief - and the fact that our industrial competition had been bombed to the stone age in the late 1930s and early to mid 1940s.

It's like looking at hitting stats of a guy on steroids until his body falls apart and then saying "see, it was better to do it his way."

The growth since Volcker sucked all that money back up has been a result of the economy being allowed to reinvest its own earnings, thus enabling the Fed to be more reasonable. The issue isn't raw increase in money supply, it's the extent to which that increase exceeds the economy's natural demand for dollars - as the economy grows clearly more dollars are needed. Becasue the economy was allowed to grow organically - allowed to reinvest its own earnings rather than having them taxed away - the Fed didn't have to grow the economy through money mischief, and could focus entirely on inflation, which is why CPI fell dramatically in the 1980s and has been low ever since.

The comparison in terms of length of expansions, incomes and, wherever you set the bar to define "rich" in terms of real income and/or real weatlh, the proportion of the country that is above that bar, is just not close.

The "poverty rate" is up slightly but the immigration rate from impoverished countries is up dramatically. Do the math - if 8 million poor people come here and the number of poor people increases by 2.5 million, people aren't "getting poorer." People are moving up - they're just being replaced 1 for 1 with imported poor people. Americans aren't becoming poor. Poor Mexicans are moving to America in larger numbers than before.

In the 1970s about 60% of Americans owned their own home. Today it's 69.5%. And homes are 50% bigger.

People are far better off. Most of the demographic shift has been from lower-middle-class to upper-middle-class - people who make between 5x and 7x the poverty level and, because they're above 5x the poverty level, are classified as "affluent" thus explaining the "shrinking" middle class.

Statistically there's about 15% going on 20% of the population that, a generation ago ate canned veggies and tuna mac cooked in avocado stoves in kitchens with corian countertops and linoleum floors who today eat food from Whole Foods cooked in stainless steel ovens in kitchens with granite countertops and slate or hardwood floors.

That's the shift. The already-rich are in fact richer but they were already rich - it's not a lifestyle change to have a second private jet or a third yacht.

Ask yourself why have Toll Brothers, Whole Foods, Starbucks, Polo been GROWTH companies? Why have almost all retail growth companies been producers or sellers of luxury items? Because their market - the proportion of the population that can afford their products - has grown dramatically. Conversely Wal-Mart's growth has come at the expense of smaller firms selling the same goods less efficiently - - - - i.e., those who have not made that class jump have at least enjoyed price stability, which they didn't have in the 1970s. They also enjoy employment stability - - we now consider 6% unemployment to be unacceptable - heck nobody blinks at today's 4.5% - - - 6% was considered pretty darned good in the Carter years.

This one's really not up for debate - the efficacy of the shift from Keynes to Friedman is about as debatable as efficacy of the shift from Bledsoe to Brady.

Answer 6

I do not agree with the premise of you question. I am a conservative and I think we should compare economic stats. It is the only way to get a really good idea of what direction our economy is headed.

Answer 7

Reagan was a great President and he gets blamed for the economy problems when it was the fault of Jimmy Carter, probably the most pathetic president we have ever had. Reagan improved the economy from where it was when Carter was in office.

Answer 8

Anyone can take figures, numbers and make them serve their purpose which you obviously did. The Libs do this and the Cons do this. The truth is every economy ebbs and flows and very little can be attributed to the President.

Answer 9

Republicans are elephants, and they always leave big piles to clean up after they finish their term.
Republicans have trickle up economics, while the Democrats have trickle down economics; by the laws of physics nothing ever trickles up.

Answer 10

Interesting that you omitted Carter's stats from you analysis.